The electronic or digital currencies which are not Bitcoin or alternative to Bitcoins are called Altcoins which have own Altcoin wallet, miners and blockchains. Projected as better alternatives to the Bitcoins with newer versions and competitive advantages, many Altcoins are designed according to the Bitcoin building blocks while some have different monetary policies built into currency to garner different usage.
Different Altcoins In The Market
Namecoin (2011) was the first Altcoin created for decentralizing registration of domain names and increasing censorship resistance and domain anonymity. In the same year, Litecoin –the closest Bitcoin competitor was introduced. It allows approval of mining transactions in every 2.5 minutes and also approves mining of 84 million coins. With scrypt, its sequential function is more memory-hard than Bitcoin’s algorithm and it excludes ASIC to create an egalitarian model for everyone to use.
Ranking 2nd in capitalization is Ether from Ethereum that runs any decentralized application’s programming code through EVM that offers efficiency in creating blockchain application. By lowering transaction cost, Ripple as a faster and more efficient solution than Bitcoin lets banks transact instantly and straightforward. Bitcoin Cash, initially a Bitcoin fork, also offers lower fees and faster transactions than Bitcoin. Ring-signatures in Monero help in completely untraceable transactions, just as Dash has decentralized master code network.
Why Altcoins Are Created –Its Popularity
Before you go for the best hardware wallet for Altcoins, keep in mind that most of these coins are created on Bitcoin’s basic P2P framework through a mining procedure which users can utilize in solving complicated problems to unblock as well as make transactions in a cheap and efficient way. The following reasons can be cited for creation and popularity of Altcoins as substitute or competitor of Bitcoins –
⮚Bitcoins had certain unchangeable rules such as production of new coins take place on Bitcoin network every ten minutes, there can be 21 million coins only and the coins are designed only as electronic money.
⮚Bitcoin mining requires huge computing power and transaction need greater time to be processed than Altcoins. Altcoins are created according to basic cryptocurrency principle but newer versions with developments regularly take place to suit the requirement of the users.
⮚Unlike Bitcoin, some Altcoins deter ASIC or GPU while its blockchain stores different metadata on former transactions as well as allows the coins to be repurposed.
⮚The conventional design, high transaction fees, excessive energy invested in proof-of-work and significant processing time in Bitcoins are some of the issues solved by Altcoins.
How To Choose Altcoins
With the drawbacks of Bitcoins, many individuals are creating different Altcoin cryptocurrency but there is hardly any guarantee that their technology utilizes blockchain or they have a trusted distributed network. While choosing, consider the following –
- There are many pre-mined scamcoins created for the creators’ profit. The creators create lots of buzz to urge people trade the coins –once all the coins are sold, the creators leave crypto market with their money while the scamcoins fizzle out without technical support.
- A potential Altcoin would incorporate new rules apart from that of Bitcoin and would offer certain applications having technical value. Reliable Altcoins are created by a reputed team with proper track record backed up by advocates and forum contributors.
- If you have the best wallet for Altcoins, make sure you go for those coins which have extensive market support. Even some Altcoin projects created by enthusiasts have developed into excellent frameworks for niche trading, online marketplaces and messaging applications to name a few. Dogecoin, for example, started off as a ‘joke’ featuring the Shiba Inu face but ended up with market capitalization of more than 14 million USD in February, 2015.
There have been instances when the value of Alcoins is found to be bound with that of Bitcoins i.e. when Bitcoins face downward spiral, Altcoins follow. The crypto market, often considered as a gambling where the future of coins seems unpredictable, does not guarantee a steady future for Altcoins either. But, with various technical glitches in Bitcoins and introduction of advanced Altcoins, you should always go for the better option.